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IC 8897 



Bureau of Mines Information Circular/1982 




Platinum Availability- 
Market Economy Countries 

A Minerals Availability System Appraisal 

By T. F. Anstett, D. I. Bleiwas, and C. Sheng-Fogg 




UNITED STATES DEPARTMENT OF THE INTERIOR 



Information Circular 8897 

Platinum Availability- 
Market Economy Countries 

A Minerals Availability System Appraisal 

By T. F. Anstett, D. I. Bleiwas, and C. Sheng-Fogg 




UNITED STATES DEPARTMENT OF THE INTERIOR 
James G. Watt, Secretary 

BUREAU OF MINES 
Robert C. Horton, Director 



As the Nation's principal conservation agency, the Department of the 
Interior has responsibility for most of our nationally owned public lands 
and natural resources. This includes fostering the wisest use of our land 
and water resources, protecting our fish and wildlife, preserving the 
environmental and cultural values of our national parks and historical 
places, and providing for the enjoyment of life through outdoor recreation. 
The Department assesses our energy and mineral resources and works to 
assure that their development is in the best interests of all our people. The 
Department also has a major responsibility for American Indian reserva- 
tion communities and for people who live in island territories under U.S. 
administration. 

no. ml 



This publication has been cataloged as follows: 



Library of Congress Cataloging in Publication Data 

Anstett, T. F. (Terrance F.) 

Platinum availability [in] market economy countries. 

(Information circular/Bureau of Mines) 8897) 

Bibliography: p. 13 

Supt of Docs no ; I 28 27: 

1 . Platinum ores. 2. Platinum I. Bleiwas, Donald I. II. Sheng-Fogg.C. (Catherine) III. Title. 
IV Series: Information circular(United States. Bureau of Mines): 8897 

TN295U4 [TN490P7] 622s [553.4'22] 82-600204 



iii 



PREFACE 



The Bureau of Mines Minerals Availability Program is assessing the worldwide 
availability of nonfuel critical minerals. The program collects, compiles, and evaluates 
information on active, developed, and explored deposits and on mineral processing plants 
worldwide. Objectives are to classify domestic and foreign resources, to identify by cost 
evaluation resources that are reserves, and to prepare analyses of mineral availability. 

This report on the availability of platinum is part of a continuing series of Minerals 
Availability System (MAS) reports to analyze the availability of minerals from domestic and 
foreign sources. Analyses of other minerals are currently in progress. Questions about the 
MAS program should be addressed to Director, Division of Minerals Availability, Bureau of 
Mines, 2401 E Street, N.W., Washington, D.C. 20241. 






v 






CONTENTS 



Page 

Preface iii 

Abstract 1 

Introduction 2 

Acknowledgments 2 

MAS evaluation and analysis procedure 2 

Deposits analyzed in this study 3 

Republic of South Africa 4 

Rustenburg 6 

Impala 6 

Western Platinum 6 

Der Brochen 6 

Zimbabwe 6 

Colombia 6 

Canada 7 

United States 7 

Stillwater Complex 7 

Salmon River 7 

Ely Spruce and Minnamax 7 

Other platinum sources 8 

Republic of South Africa 8 

Brazil 8 

Canada 8 



_ Page 

Other platinum sources — Continued 

United States 8 

Soviet Union 3 

Zimbabwe 3 

Engineering and cost evaluation 9 

Assumptions 9 

Operating and capital costs 9 

Analysis of platinum availability 10 

Total availability 10 

Annual availability 10 

Availability from domestic sources 11 

Analysis of factors affecting platinum 

availability 11 

Impact of byproduct credits 11 

Impact of operating and capital costs 1 -| 

Secondary supply from U.S. sources i 2 

Technological enhancements -jo 

Summary and conclusions 1 2 

Bibliography 13 

Appendix A. — Central economy countries 14 

Appendix B— Mining and processing operations for 

a typical South African property 14 



ILLUSTRATIONS 



1 . Flowsheet, MAS evaluation procedure 3 

2. Classification of mineral resources 3 

3. Location map, South African deposits 5 

4. Location map, Zimbabwean deposits 6 

5. Total platinum potentially available from primary platinum deposits 10 

6. Annual platinum potentially available at selected incentive prices 11 

7. Potential platinum availability, without byproduct credits 11 

8. Platinum potentially available from "low cost" deposits, with a 25-percent operating cost increase 12 

B-1 . Flowsheet, South African PGM ore processing 15 

B-2. Flowsheet, conventional refining process 15 

B-3. Flowsheet, OPNIM refining process 16 



TABLES 



1 . Estimated 1 980 world platinum and palladium production 2 

2. Platinum deposit information 4 

3. Platinum resource information, demonstrated level, by country 4 

4. Byproduct commodity prices 9 

5. Estimated typical operating costs 1 



PLATNIUM AVAILABILITY— MARKET ECONOMY COUNTRIES 
A Minerals Availability System Appraisal 

By T. F. Anstett, 1 D. I. Bleiwas, and C. Sheng-Fogg 2 
ABSTRACT 



The Bureau of Mines investigated the availability of platinum from known major deposits 
in market economy countries. Fifteen of these deposits contain demonstrated resources 
totaling 302 million troy ounces of platinum. Detailed geologic, engineering, and cost 
evaluations were performed on each deposit to determine its potential for platinum 
production. There are large amounts of demonstrated platinum potentially available from 
market economy deposits that were not analyzed owing to lack of adequate data or to 
technological limitations. These include 297 million troy ounces contained in the UG2 and 
Platreef of the Bushveld Complex, South Africa. 

This analysis indicates that about 1 10 million troy ounces (2.3 million ounces annually) of 
platinum are potentially available at the January 1980 producer price of $420 per troy 
ounce, nearly all from South Africa. An additional 85 million troy ounces occurring in 
Zimbabwean deposits would become available only through more than a quadrupling of 
that price. In order to meet projected world demand of 3.5 million troy ounces in 1 990, 
platinum price may have to increase. Only one domestic deposit, the Salmon River in 
Alaska, is capable of producing platinum at $420 per troy ounce. Regardless of price, at 
assumed production capacities, domestic deposits could supply less than 10 percent of 
annual U.S. requirements. 



1 Geologist, Minerals Availability Field Office, Bureau of Mines, Denver, Colo. 

2 Physical scientist, Minerals Availability Field Office, Bureau of Mines, Denver, Colo. 



INTRODUCTION 



The National Material and Minerals Policy. Research and 
Development Act of 1980 established, among other objec- 
tives, a goal of providing for the security of foreign mineral 
imports. In order to establish and implement a coherent, 
effective policy, it is necessary to develop and analyze data 
on mineral resources for the United States and the rest of the 
world. The purpose of this report is to present the results of 
the Bureau of Mines analysis of the availability of platinum 
from domestic and other market economy sources. 3 

The price of platinum, like that of other precious metals, is 
often subject fo speculative pressures quite unrelated to 
industrial utility; however, the metal possesses a wide variety 
of physical and chemical properties that make it essential in 
many industrial applications, including auto emissions 
control, petroleum refining, and glass fiber manufacturing. 
The metal is also used as a catalyst in the chemical and 
pharmaceutical industries, and in a wide variety of electrical 
and electronic devices. 

Platinum is recovered as the primary metal in ores from 
South Africa and placer deposits in various countries 
throughout the world. Significant quantities of the metal are 
recovered as a byproduct from the nickel-copper Noril'sk and 
Sudbury deposits of the Soviet Union and Canada, 
respectively. Table 1 shows 1980 world production of 
platinum by country and geologic source. A more detailed 
discussion of platinum production and consumption is 
available from other Bureau of Mines sources {13, 16).' 

The United States obtains approximately 90 percent of its 
platinum from foreign sources; the remaining 10 percent is 



3 Only market economy countries were evaluated in this study. "Market 
economy country " is a term used by the Bureau ot Mines to denote a country 
that does not have a centrally planned economy (appendix A). 

4 Italicized numbers in parentheses refer to items in the bibliography 
preceding the aooendixes. 



derived as a byproduct of gold and copper production and 
from recycling. A disruption of the supply of this strategic 
metal could have a significant impact on the United States. 
The Republic of South Africa, the world's leading producer of 
platinum, has historically been a reliable source of supply to 
the United States. However, the political uncertainty of many 
African countries has served to raise concern in the United 
States regarding the continued availability of this important 
metal. 

Although previous reports (e.g., 17) have addressed, in 
general terms, the subject of platinum resources in known 
deposits, a search of the literature revealed that no 
comprehensive studies or analyses have been published 
regarding potential availability on an individual deposit 5 basis. 
The procedure for conducting this analysis was as follows: 

1. The quantity and grade of platinum resources were 
evaluated in relation to physical, technological, and other 
conditions that affect production from each deposit. 

2. The capital investments and operating costs associated 
with mining, concentrat'ng, smelting, and refining operations 
were estimated. 

3. A cost analysis for each deposit was performed. The 
results of the analysis indicate the unit cost and associated 
tonnage of platinum that could be recovered at specific 
production levels for each deposit. 

4. Cost-production relationships were combined and 
analyzed in the form of a platinum availability curve to show 
the platinum production potential at various commodity 
prices. 

5. Sensitivity analyses were performed in order to 
determine the effects of various parameters (e.g., operating 
costs, byproduct prices) on platinum availability. 

5 For purposes of this study, "deposit" is hereafter defined as that portion of 
an exploitable or potentially exploitable mineralized body owned and/or 
operated by a specific entity. 



TABLE 1. — Estimated 1980 world platinum and palladium production 



Production, troy ounces 



Country 



Source 



Platinum 


Palladium 


Total PGM 1 


2,500 


7,200 


9,850 


162,000 


186,000 


404,585 


14,345 





14,345 


120 





120 


NA 


NA 


590 


12,900 


29,700 


NA 


1,891,000 


806,000 


3,100,000 


812,500 


2,177,500 


3,250,000 


1,000 


2,000 


3,348 


700 


5,300 


NA 


3,000 

> 


6,800 


9,800 



Australia 

Canada 

Colombia 

Ethiopia 

Finland 

Japan 

Republic of South Africa 

USSR 

United States 

Yugoslavia 

Zimbabwe 

Total 



Byproduct of nickel ores 

Byproduct of nickel-copper ores 

Placer 

. . do 

Byproduct of copper ores 

Byproduct of nickel and copper ores 2 

PGM 1 ores 

Placer, and byproduct of nickel-copper ores . . . 
Placer, and byproduct of gold and copper ores 

NA 

Byproduct of nickel ore 



2,900,065 



3,220,500 



6,792,638 



NA Not available. 

1 Platinum-group metals (platinum, palladium, iridium, osmium, rhodium, ruthenium). 

2 Imports from several countries including Australia, Canada, Indonesia, Papua New Guinea, and the Philippines, 



Sources: 13, table 4; 16, table 9. 



ACKNOWLEDGMENTS 

The authors wish to thank J. Roger Loebenstein, William 



C. Butterman, and Christine M. Moore of the Bureau of 
Mines, Division of Nonferrous Metals, for their assistance in 
identifying the properties and associated resource tonnages 



included in this report. Personnel at Bureau of Mines Field 
Operations Centers in Juneau, Alaska, Denver, Colo., and 
Spokane, Wash., supplied much of the data for the domestic 
deposits included in this study. 



MAS EVALUATION AND ANALYSIS PROCEDURE 



A flow chart of the Minerals Availability System (MAS) 
evaluation and analysis procedure is shown in figure 1 . Data 
collection for foreign deposits was performed under contract, 
while data for domestic deposits were collected by Bureau of 



Mines personnel at Field Operations Centers in Spokane, 
Wash Denver, Colo., and Juneau, Alaska. This section of 
the report presents the criteria used to select deposits for the 
analysis, the sources of data used for grade and tonnage 



Identification 

and 

selection 

of deposits 



To n n age 

and grade 

determination 



Enginee ring 

and cost 

eva I u ation 



| Mineral 
Indust r ies I 



J Location « 
! System I 
I (MILS) | 
j data j 



MAS 

computer 

data 

base 



Taxes, 

royalties, 

cost indexes, 

prices, ere... 



Deposit 

report 

preparation 



MAS 

per manent 

deposit 

files 



Data 

sel ection and 
va I idation 



Variable and 

parameter 

adjustments 



Economic 
analysis 



Dafa I 



Sensitivity 
ana lysis 



Availabilityi 
curves 



Analytical 
reports 



j± 



W 



Data 



Availability 
curves 



Analytical 
reports 



FIGURE 1. — Flowsheet, MAS evaluation procedure. 



determination, and the various assumptions used to evaiuate 
the amount of platinum potentially available from each 
deposit. Engineering and cost evaluation procedures are 
outlined in a later section. 

Selection was limited to deposits in market economy 
countries containing demonstrated platinum resources 
according to the definitions outlined in the reserve-resource 
classification system developed by the Bureau of Mines and 
U.S. Geological Survey (fig. 2). The producing deposits 
analyzed accounted for 91 percent of 1980 primary platinum 
production from market economy countries. The only 
deposits containing byproduct platinum that were included in 
the analysis were the Ely Spruce and Minnamax deposits in 
Minnesota. They were included because of their potential to 
contribute significantly to U.S. production. Deposits of the 
Sudbury district of Canada and the Empress Mine fn 



Zimbabwe, which produce platinum as a byproduct of nickel, 
were not analyzed owing to a lack of required data. 

Information on grades, tonnages, and other physical 
criteria affecting platinum availability was obtained from 
numerous sources, including Bureau of Mines and Geologic- 
al Survey publications, professional journals, industry pub- 
lications, annual reports, company 10K reports and prospec- 
tuses filed with the U.S. Securities and Exchange Commis- 
sion, and data provided by private companies and contrac- 
tors. The personal knowledge and judgments of Bureau of 
Mines engineers and geologists were frequently utilized. 

Since many of the deposits analyzed are nonproducers, 
certain assumptions relative to prospective operations on 
those deposits were made. Where appropriate, the assump- 
tions pertinent to each deposit are stated. 



Cumulative 
Production 




IDENTIFIED RESOURCES 


UNDISCOVERED RESOURCES 


Demonstrated 


Inferred 


Probability Range 

fnr\ 


Measured 


Indicated 


\0[ j 

Hypothetical } Speculative 






l 
ECONOMIC 


Res< 


jrve 
se 


Inferred 

Reserve 
Base 


I 1 ' 

4- - 

i 


MARGINALLY 
ECONOMIC 


Bo 






SUB- 
EC0N0MIC 




1 





Other 
Occurrences 



Includes nonconventional and low-grade materials 



FIGURE 2.— Classification off mineral resources. 



DEPOSITS ANALYZED IN THIS STUDY 



Table 2 contains a list of deposits investigated by the 
Bureau of Mines. Owing to a lack of adequate resource, 



engineering, and/or cost information, detailed analyses could 
not be performed for several of the deposits. Those that were 



not analyzed are marked with an asterisk; a more detailed 
discussion of these deposits may be found in the section 
"Other Platinum Sources." Table 3 contains resource 
information for the deposits that were analyzed. 

The Bureau of Mines has established a reserve base for 
platinum, which contains the in-place demonstrated (mea- 
sured plus indicated) resource from which reserves are 
established, and includes those resources that are currently 
economic or marginally economic and some of those that are 
currently subeconomic (fig. 2). The platinum reserve base 
contains about 513 million troy ounces. The deposits 
analyzed in this study contain a total of approximately 302 
million troy ounces of platinum. Included in the reserve base, 
but not in this analysis, are 350 million troy ounces in the 
Norilsk and Sudbury deposits of the Soviet Union and 
Canada, respectively, and the UG2 and Platreef intervals of 
the Bushveld Complex, South Africa. These deposits were 
excluded primarily owing to a lack of sufficient data or to 
technological limitations. However, included in this analysis 
are 139 million troy ounces in the Great Dyke of Zimbabwe, 
for which data were available. Because of high production 
costs, the Zimbabwean resources have been placed in the 
subeconomic category shown on figure 2. 

The deposits analyzed as part of this study were evaluated 
at the demonstrated level owing to the lack of credibility in 
resource data at lower levels of geologic confidence and the 
fact that there are adequate demonstrated resources to fulfill 
demand for the foreseeable future. However, there are 



estimated to be an additional 1 .0 to 1 .3 billion troy ounces of 
identified platinum in known market economy deposits (13). 
Following is a discussion, by country, of each of the 
deposits analyzed for this report. 



REPUBLIC OF SOUTH AFRICA 



The Republic of South Africa is the world's largest supplier 
of platinum, accounting for 65 percent of world production in 
1980 (table 1). Nearly all of South Africa's platinum is derived 
from operations on the Merensky Reef of the Bushveld 
Igneous Complex, the largest known layered magmatic 
sequence in the world, occupying an area of 26,000 square 
miles. The Merensky Reef is generally continuous through- 
out the entire complex and contains a total of 159 million troy 
ounces of platinum at the demonstrated level. Buchanan (2) 
has estimated the total platinum reserves 6 in the Merensky 
Reef to be 333 million troy ounces, calculated to a depth of 
3,900 feet. Platinum-group metal (PGM) grade averages 
about 0.25 troy ounces per metric ton (oz/t), with platinum 
constituting 61 percent and palladium 26 percent of total 
PGM content (2, p. 56). 

6 Although Buchanan refers to his figures as "reserves," the term is not 
defined in his paper, and does not necessarily correspond with the term as 
defined in U.S. Geol. Survey Circ. 831 (25). 



TABLE 2. — Platinum deposit information 



State and or Country and deposit 



Type of deposit 



Owner and/or operator 



Status 1 



Type 2 



Alaska: 

Salmon River 

•Salt Chuck 

Minnesota: 

Ely Spruce 

Minnamax 

Montana: 

Stillwater 

Anaconda 

Brazil: 

"Santa Catarina 

"Ouro Branco 

Canada: 

Lac des lies 

"Sudbury 

Colombia: Choco Pacifico 
South Africa: 3 

Der Brochen 

Impala 

Rustenburg 

Western 

Zimbabwe: 
'Empress 

Hartley 

Musengezi 

Selukwe 

Wedza 



Placer 

Ultramafic intrusive 



.do 
.do 



.do 
.do 



NA 

Sedimentary 



Layered volcanic . . 
Ultramafic intrusive 
Placer 



Ultramafic intrusive 

do 

do 

do 



do. 
do. 
do. 
.do. 
do. 



Hanson Properties, Inc. . 

Fox Geological Consultants. Ltd. 



Inco Ltd 

AMAX Exploration, Inc. 



Stillwater PGM Resources 
Anaconda Minerals Co. . . 



NA 
NA 



Boston Bay Mines Ltd. 

Numerous 

Mineros del Choco . . . 



Platinum Proprietary Ltd 

Impala Platinum Holdings Ltd. . 
Rustenburg Platinum Mines Ltd. 
Western Platinum Ltd 



Empress Nickel Mining Co., Ltd. 

n 

8 

( 4 ) 



Dev 


PI 


Exp 


UG 


Exp 


OP 


Exp 


UG 


Dev 


UG 


Dev 


UG 


NA 


NA 


Exp 


Unknown 


Exp 


OP 


Prd 


UG 


Prd 


PI 


Exp 


UG 


Prd 


UG 


Prd 


UG 


Prd 


UG 


Prd 


UG 


Exp 


UG 


Exp 


UG 


Exp 


UG 


Exp 


UG 



* Deposit not analyzed for availability study. NA Information not available. 
' Dev — Developing mine: Exp — Explored deposit; Prd — Producing mine. 

2 OP — Open pit; PI — Placer; UG— Underground. 

3 Includes Merensky Reef deposits only. 

* Ownership not accurately defined, but Union Carbide Management Services Ltd., 
(Zimbabwe) Group are known to be actively participating in potential development. 



Anglo-American Management Services Ltd., and Rio Tinto Mining 



TABLE 3 Platinum resource information, demonstrated level, by country 1 

pla.irlumgrade, materfeftillion Platinum, million troy ounces 

Country oz/t 2 metric tons Contained Recoverable 

Canada, Colombia 3 (*) (7) i ~ 

South Africa 0.153 1,041 159 112 

United States C) O 3 2 

Zimbabwe .064 2,175 139 85 

Total NAp NAp 302 200 

1 Does not include Sudbury Complex of Canada, or UG2 and Platreef deposits of South Africa. 

2 Troy ounces platinum per metric ton of ore. 

3 Canada and Colombia have been combined to avoid disclosing individual company data. 

4 Aggregate figures not calculated owing to a mixture of several different deposit types. 



Percent of 
MAS total 




56 

1 
43 



100 



Four separate Merensky Reef deposits have been 
included in this study, three of which are currently being 
mined and account for all of South African ore production 
from the Reef (fig. 3). The producers are Rustenburg, Impala, 
and Western Platinum. Der Brochen is an undeveloped 
deposit. Production is dominated by Rustenburg, which 
accounted for 56 percent of total South African platinum 
output in 1979. Impala accounted for 41 percent, and 
Western Platinum supplied the remaining 3 percent (2, p. 
58). All of the deposits are mined primarily for their PGM 
content, with nickel and copper as major byproducts. 





\ 




, IO°S 




f~ ZIMBAB^ 


a/eI / 


20°S 




/Rus- 


r enbura/ 






L-^ / 


VTS 






REPUBLIC 
OF /? 




30°S 




Ur fyf 




■"^ 




SOUTH / 




^ 
>» 




AFRICA/ 




-> 


Ill 


Hi 


111 




f N 


IO 


% 





Because of the highly regular and predictable nature of the 
dip, strike, thickness, and grade of the ore-bearing interval, 
the Merensky Reef is mined using simple, conventional 
stoping methods. This allows for large areas of relatively 
shallow deposits to be brought into production in less than a 
year; consequently, production and development rates can 
respond quickly to, and keep pace with, changes in the price 
of and demand for platinum. 



LEGEND 




O 
A 
D 
X 



Approximate boundary of 
Bushveld Complex 

Rustenburg sections 

Western Platinum 

Impala 

Der Brochen 



N 



CT3 




Rustenbur 



Pretoria 




Lydenburg 



50 

1 ■ ' ■ ' ■'! ' 



I00 Miles 



50 



I00 I50 Kilometers 



FIGURE 3. — Location map, South African deposits. 



Rustenburg 

The Rustenburg deposit, leased and operated by Rusten- 
burg Platinum Mines Ltd., is located in the western Transvaal 
Province. It consists of four sections, all of which are 
currently being mined. The sections, with the approximate 
percentage each contributes to total Rustenburg annual 
production, are Rustenburg (67), Amandalbult (15), Union 
(15). and Atok (3). Platinum production in 1979 from the four 
sections totaled 1 .2 million troy ounces (2, p. 58). Each of the 
sections has its own concentration plant and smelter. Copper 
and nickel refining occurs at Rustenburg, and 75 percent of 
the PGM refining is done in Wadeville, Germiston, South 
Africa, located 25 miles east of Johannesburg. The other 25 
percent is refined in Royston, England. 

Impala 

The Impala lease holdings, which consist of several mining 
operations, produced 870,000 troy ounces of platinum in 
1979, or 41 percent of total Republic of South Africa 
production in that year (2. p. 58). The deposit is leased and 
operated by Impala Platinum Holdings Ltd. It is located 
mainly on Bafokeng tribal ground in the western part of the 
Transvaal, approximately 10 miles north of the town of 
Rustenburg. The Impala concentrator and smelter are 
located onsite, and refining occurs in the village of Springs, 
near Johannesburg, about 115 miles from the mine. 

Western Platinum 

The Western Platinum operation, owned by Western 
Platinum Ltd., is located in the western Transvaal about 20 
miles east of the town of Rustenburg. The mine produced 
74,000 troy ounces of platinum in 1979, or 3 percent of total 
Republic of South Africa production in that year (2, p. 58). 
Ore from the Western Platinum mine is milled and smelted 
onsite. The copper-nickel matte is shipped to Falconbridge's 
refinery in Kristiansand, Norway, and the resulting PGM-. 
bearing sludge is returned to the Lonrho refinery at Brakpan, 
South Africa, for final processing. 

Der Brochen 

Der Brochen is an explored, nonproducing deposit located 
in the eastern part of the Transvaal, south of the town of 
Lydenburg. Mineral rights to the deposit are owned by 
Platinum Proprietary Ltd. of Lydenburg. For purposes of this 
analysis, a development plan similar to that of the Western 
Platinum operation was assumed, with production modeled 
to begin in 1988. It was assumed that processing and 
smelting would be done onsite, with copper-nickel refining 
performed in a Norwegian refinery, and PGM concentrates 
returned to a refinery in Lydenburg. 

ZIMBABWE 



The Great Dyke of Zimbabwe includes four separate 
igneous complexes containing large quantities of platinum in 
association with palladium, nickel, and copper (fig. 4). The 
names of the complexes are Hartley, Selukwe, Wedza, and 
Musengezi. The PGM of the Great Dyke occur in a 
30-inch-thick interval, mineralogically similar to the Merensky 
Reef of the Bushveld Complex; this interval is continuous in 
all four complexes. The PGM-bearing interval averages 0.25 
percent nickel, 0.25 percent copper, and 0.10 to 0.16 oz/t of 
combined platinum and palladium ( 12). The four complexes 
together contain a total of about 139 million troy ounces of 
platinum at the demonstrated level. 

Currently, there are no major platinum mining operations 
on the Great Dyke. An experimental mine, the Mimosa, was 




— i Musengezi 
=T Complex 



_ Hortley 
Complex 



Selukwe 
Complex 



Wedzo 
Complex 



50 



~~ I n 

100 150 Kilometers 



FIGURE 4.— Location map, Zimbabwean deposits. 

established in the Wedza Complex and produced during 
1970, 1971, and 1976 to 1978. A second test operation 
started in 1980 at Rio Tinto's Zinca Prospect in the Hartley 
Complex. Development drilling is proceeding there, with a 
test mine shaft planned by 1982. 

For purposes of this analysis, all of the deposits were 
modeled to begin production in 1 984, preceded by 4 years of 
development. Mine production rates are equivalent to 
existing chromite operations on the Great Dyke, while 
processing procedures were modeled after platinum opera- 
tions in South Africa. It has been assumed that the 
concentrate would be smelted in Zimbabwe, with the 
resulting PGM-bearing nickel-copper matte refined in Nor- 
way. Final PGM refining would be performed in Zimbabwe. 

COLOMBIA 

According to official production records, Colombia 
accounts for less than 1 percent of world platinum supply. 
However, it is estimated that only about half of the total 
Colombia platinum production is traded on the free market, 
and the remainder is unreported. Production is from placer 
deposits located along the eastern margin of the Choco 
coastal plain, adjacent to the western slope of the Andes 
Mountains, in the Choco Department. The Colombian 
placers led world production as late as 1923, but were later 
surpassed by the rich South African Bushveld Complex. 
Official production in 1980 was 14,345 troy ounces. 

This study includes the Choco Pacifico platinum operation, 
which accounts for about 50 percent of reported Colombian 
production. Independent small producers in the Choco 



Department account for most of the remaining reported 
production. Concessions on the Choco deposit are presently 
held by Mineros del Choco, a workers' cooperative that 
acquired the land and equipment from the Choco Pacifico 
Co. in 1975. 

The deposit consists of platinum, gold, and silver in 
Pleistocene and Recent alluvial gravels along the San Juan 
River. Thickness of the gravel beds ranges from 30 to 50 
feet. The operation uses standard bucket line dredges with a 
trommel-screen-jig circuit for gold and silver recovery. The 
three dredges currently in operation have a total capacity of 
about 6.7 million metric tons per year, but production has 
averaged less than 4.5 million metric tons annually since 
1974. Most of the dredges and power generation equipment 
have been in use for 30 to 50 years and are in need of 
complete replacement. At present, Mineros del Choco 
reportedly is bankrupt, and the capital investment necessary 
to replace aged equipment and prove additional reserves is 
not likely to be forthcoming. However, several other 
companies have recently shown an interest in further 
developing the deposit. 

CANADA 

Canadian production of platinum totaled about 162,000 
troy ounces in 1980. Although this figure is about 6 percent of 
world production in that year, Canada's resources account 
for far less than 1 percent of total known platinum resources 
in market economy countries. Platinum-group metals in 
Canada are largely derived as byproducts of nickel-copper 
production from the Sudbury Complex. Owing to a lack of 
adequate information at the time of this study, the Sudbury 
deposits were not analyzed in detail. However, they are 
discussed in a later section of this report. 

Lac des lies is an undeveloped deposit located about 55 
miles northwest of Thunder Bay, Ontario. It is believed to be 
a volcanogenic sulfide deposit containing disseminated 
grains of PGM, along with copper, nickel, and gold. 
Altogether, nine mineralized zones occurring in an area 1 .7 
miles by 0.2 mile have been identified. The deposit contains 
approximately 22 million metric tons averaging 0.125 oz/t 
PGM {19, p. 15). 

For purposes of this analysis it was assumed that the 
deposit would be open pit mined, with milling done onsite, 
and that the mill concentrate would be sold to Inco Ltd. at 
Copper Cliff, located in the Sudbury District. Production was 
modeled to begin in 1983. 

UNITED STATES 

In the United States, platinum is presently recovered 
mainly as a byproduct of copper refining, but the amount 
produced is far less than 1 percent of the world total. 
Properties included in this study are Stillwater PGM 
Resources' and Anaconda's deposits in the Stillwater 
Complex in Montana, and Inco Ltd.'s Ely Spruce and AMAX 
Exploration, Inc.'s Minnamax deposits in the Duluth Gabbro, 
Minn. All are nonproducers. Also included is the Salmon 
River placer deposit, in Alaska, which is currently under 
development. 

Stillwater Complex 

The Stillwater Complex is an elongate, tabular assemblage 
of Precambrian differentiated mafic and ultramafic igneous 
rock that crops out along the northern front of the Beartooth 
Mountains in south-central Montana. The Complex is 
exposed over a length of 25 miles and a width of 1 to 5 miles. 
The ore-bearing interval is generally continuous throughout 
the complex and averages approximately 6 feet in thickness. 
Stillwater PGM Resources, a joint venture partnership 
between Manville Products Corp. and Chevron Resources 
Corp., and Anaconda Minerals Co. are the two concerns that 



control virtaully the entire known Stillwater resource. 

Buchanan (2, p. 57) has estimated the platinum reserves 
of the entire complex to be 7 million troy ounces. The two 
deposits evaluated at the demonstrated level for this analysis 
contain less than one-third of this total; however, there are 
believed to be substantial additional tonnages present at a 
lower level of geologic confidence. The combined platinum 
and palladium grade of the mineralized zone, common to 
both deposits, is 0.6 to 0.83 oz/t (9). 

Both operations will probably use a modified shrinkage 
stoping method, with ore milled and floated onsite. Several 
plans dealing with the post-milling treatment of ore have 
been considered, ranging from construction of a nearby 
smelter to shipping the nickel-copper concentrates to a 
nickel-copper smelter and refiner. For this evaluation, the 
concentrates were assumed to be sent to Inco's Copper Cliff 
facilities in Ontario and the resulting PGM concentrates to 
Royston, England. 

In August 1981, Anaconda submitted an operating permit 
application to the Montana Department of Lands, proposing 
to begin development of the Stillwater deposit. Pending 
approval by the State, full production, planned to be in the 
range of 30,000 to 35,000 troy ounces of platinum per year 
(about 3 percent of U.S. requirements), could begin by late 
1984 or early 1985 (9). Stillwater PGM Resources reportedly 
plans to submit a similar plan sometime in early 1982. For 
purposes of this analysis, both properties have been 
modeled to begin production in 1984. 

Salmon River 

The Goodnews Bay Mine, located along the Salmon River 
near the Bering Sea in western Alaska, has been the largest 
producer of primary platinum in the United States. Production 
from 1934 to 1975 totaled 641 ,000 troy ounces. It has been 
estimated that the deposit could yield an additional 500,000 
troy ounces at a rate of 1 0,000 ounces per year, equivalent to 
about 1 percent of domestic platinum needs (10). The 
platinum is located within the lower 6 to 8 feet of an alluvial 
gravel section that measures up to 250 feet in thickness, and 
within the upper 3 feet of altered sedimentary and igneous 
bedrock. 

Although production ceased after the 1975 season, 
development resumed on a limited basis in 1980 after the 
deposit was purchased by Hanson Properties, Inc., of 
Spokane, Wash. For this analysis, it was assumed that future 
operations will continue to use dredging as the primary 
mining method, and the gravels will be milled using gravity 
methods. The gravels will be sized using a trommel and the 
resulting fines sent to riffle tables, followed by jigs and 
sluices. The resulting concentrate was modeled to be sent to 
Engelhard Industries in New Jersey for refining. 

There is a possibility of including an underground mining 
operation on the deep reserve areas if technical difficulties 
can be overcome. Potential problems include poor roof 
stability and excessive water. For purposes of this report, 
only surface operations were considered. 

Ely Spruce and Minnamax 

AMAX Exploration's Minnamax and Inco's Ely Spruce 
deposits in northeastern Minnesota could supply a significant 
amount of platinum as a byproduct of copper-nickel 
production. The Minnamax deposit consists of a mineralized 
zone within the Duluth Gabbro, a large basic intrusion that 
occurs over more than 100 square miles in the Lake Superior 
region. The Duluth Gabbro itself has been intruded by a 
number of other units, one of which is the South Kawishiwi 
Intrusive. The Ely Spruce deposit consists of a mineralized 
zone located within this secondary intrusive. Together, the 
two deposits contain less than 800,000 troy ounces of 
platinum at the demonstrated level. 

Ely Spruce would most likely be mined by open pit 
methods, and Minnamax would be mined by various 



underground methods, as dictated by the nature of the ore 
and host rock. For this analysis, concentrates from both 
deposits have been modeled to be shipped to a smelter- 
refinery complex to be built in Duluth, Minn. 

In August 1981. AMAX announced indefinite postpone- 
ment of its project owing to depressed metal prices (8). Work 



on Inco's Ely Spruce project was suspended in November 
1975, following sinking of a development shaft that was 
completed in 1968 (11, p. 302). However, in order to be 
included in this analysis, both deposits were modeled to 
begin production in 1983. 



OTHER PLATINUM SOURCES 



There are several world sources of platinum that were 
excluded from analysis because of a lack of adequate cost 
and or engineering data. As information becomes available, 
these sources will be included in future studies. A few of the 
deposits are significant or potential producers and therefore 
merit a brief discussion. 



REPUBLIC OF SOUTH AFRICA 

In addition to the Merensky Reef, from which practically all 
South African platinum is produced, the Bushveld Complex 
contains the UG2 and Platreef platinum-bearing intervals. 
Together, the UG2 and Platreef contain 297 million troy 
ounces of platinum at the demonstrated level. Total platinum 
reserves in the two units have been estimated by Buchanan 
(2. p. 56) to be on the order of 597 million troy ounces, 
calculated to a depth of 3,900 feet. 

The UG2 is approximately 2 feet thick and located between 
330 and 1,155 feet below the Merensky Reef. Its existence 
has long been known, but exploitation has never been viable, 
owing to smelting problems associated with the relatively 
high chromite content. It contains a higher grade of PGM 
than the Merensky (0.28 oz/t versus 0.25 oz/t), including 
nearly three times as much rhodium, the most valuable of the 
PGM (2, p. 56). 

The high precious-metal grades, substantial tonnage, and 
accessibility of the UG2 have encouraged several companies 
to attempt to develop processes to remove chromite prior to 
smelting or, in the case of Texasgulf Inc., to acquire a 
process using a high-temperature plasma furnace (3, p. 75). 
Western Platinum Ltd. has reportedly announced plans to 
exploit the UG2 using a process developed by South Africa's 
National Institute of Metallurgy ( 14). However, because of the 
lack of cost data concerning the project and the fact that the 
process has not yet been proven on a commercial scale, the 
UG2 was not included in this analysis. 

The Platreef interval, which ranges between 0.22 and 0.84 
oz t PGM, is located at the contact between the Bushveld 
Complex and underlying rocks (2, pp. 56, 58). Owing to the 
disseminated and erratic distribution of mineralization 
throughout the Platreef, it would most likely be mined by 
low-cost open pit methods. 



BRAZIL 

Brazil's national reserves of platinum, all located in the 
southern part of the country in the State of Santa Catarina, 
amount to 766,000 metric tons of measured ore with a grade 
of 0.09 oz/t. Platinum also occurs in quartzitic and 
conglomeratic lenses within a metasedimentary Precambrian 
sequence exposed in the Ouro Branco Mountains, in the 
State of Minas Gerais. Other occurrences of platinum and 
PGM are reported in the States of Goias and Rondonia. 



Irruptive is a large, layered complex of igneous origin. The 
nickel-copper ores are sulfide-rich portions of a discon- 
tinuous sublayer at the base of the complex, containing an 
average of 0.03 oz/t PGM. Platinum constitutes 44 percent of 
the total PGM content and palladium, 46 percent. Buchanan 
(2, p. 57) has estimated the reserves of the entire complex to 
be on the order of 3.4 million troy ounces of platinum and 3.6 
million troy ounces of palladium. 

Inco Ltd. accounts for 80 to 90 percent of Canadian 
platinum output, primarily from its 1 1 underground mines at 
Sudbury. Falconbridge Nickel Mines, Ltd., currently operates 
six underground mines at Sudbury and accounts for the 
remaining 10 to 20 percent of Canadian platinum production. 
Inco operates its own smelter-refinery complex at Copper 
Cliff, Ontario, with final recovery of PGM at Acton, England. 
Falconbridge smelts concentrates at Sudbury, refines 
nickel-copper at its plant in Kristiansand, Norway, and either 
recovers the PGM at its precious metals refinery in Norway, 
or ships the PGM-rich residue to the Engelhard refinery in 
Newark, N.J. 

UNITED STATES 

In addition to Stillwater, Salmon River, Ely Spruce, and 
Minnamax, there are numerous other U.S. deposits with 
reported occurrences of platinum. One of the most notable 
reported occurrences, the Salt Chuck Mine, was investigated 
as part of this study but was excluded from the availability 
analysis because resources at the demonstrated level were 
considered to be too small to be of major significance at this 
time. 

Salt Chuck is a past producer of PGM located on the 
Kasaan Peninsula of southeastern Alaska. Mineralization 
occurs in a concentrically zoned ultramafic complex within 
the Coast Range Intrusive. The mine produced less than 
300,000 metric tons ot ore intermittently between 1 907 and 
1941. Demonstrated resources are less than 1,000 troy 
ounces of PGM, while total mineralized material at the 
inferred level is estimated to be only about 600,000 metric 
tons at 0.014 oz/t PGM; however, there are believed to be 
more deposits in the area. 



SOVIET UNION 

The Soviet Union produced about 812,500 troy ounces of 
platinum in 1980, or 28 percent of the world total (table 1). 
The copper-nickel Noril'sk deposits are believed to account 
for 90 percent of total Soviet PGM production, and Buchanan 
(2, p. 57) has reported reserves of platinum to be 50 million 
troy ounces. Other central economy countries (e.g., Poland) 
also contain potentially significant platinum resources. 



ZIMBABWE 



CANADA 

Nearly all Canadian platinum production is a byproduct of 
nickel-copper mining in the Sudbury District. The Sudbury 



Zimbabwe produced 3,000 troy ounces of platinum in 
1980, mainly as a byproduct of nickel production at the 
Empress Mine. Mineralization occurs within an amphibolite 
intrusive in Precambrian greenstones of the Bulawayan 
System. 



ENGINEERING AND COST EVALUATION 



After a deposit was selected for inclusion in the analysis, 
an engineering evaluation was performed. For producing 
deposits, production rates, capacities, and other pertinent 
production information were adapted for use in the study. For 
deposits not yet in production, appropriate mining and 
concentration methods, production rates, capacities, and 
other important factors were estimated using standard 
engineering procedures. As an example, a complete 
description of mine, mill, and postmill processing for a typical 
South African operation is given in appendix B. The 
processes described were also used as a general model for 
nonproducing deposits. 

Capital expenditures were calculated for exploration, 
acquisition, development, mine plant and equipment, and 
constructing and equipping the mill plant. Capital expendi- 
tures for the different mining and processing facilities include 
the costs of mobile and stationary equipment, construction, 
engineering, facilities and utilities, and working capital. 
Facilities and utilities (infrastructure) is a broad category that 
includes, among other things, the costs of the water system, 
fire protection, roads, fences, and fuel and power distribution. 
Working capital is a revolving cash fund required for 
operating expenses such as labor, supplies, taxes, and 
insurance. 

Mine, mill, smelting, and refining operating costs, and 
transportation charges were also calculated for each deposit. 
The total operating cost is a combination of direct and indirect 
costs. Direct operating costs include materials, utilities, direct 
and maintenance labor, and payroll overhead. Indirect 
operating costs include technical and clerical labor, adminis- 
trative costs, facilities maintenance and supplies, and 
research. Other costs in the analysis are fixed charges 
including taxes, insurance, depreciation, deferred expenses, 
and interest payments. 

When possible, actual company cost data were used. If 
these were not available, the required capital and operating 
costs were estimated by standardized costing techniques or 
from a cost-estimating manual prepared for the Bureau of 
Mines (4). The Bureau's costing system is designed for 
preparing capital and operating cost estimates through the 
use of equations, curves, and factors. The system, based on 
an average of the costs for existing mining operations in the 
United States and Canada, covers operations of different 
sizes. Correct use of the costing system will produce a 
reliable estimate, which historically has fallen within 25 
percent of actual costs. These data are then used to perform 
a financial analysis for each deposit. 

All capital and operating costs have been adjusted to 
January 1980 dollars. Foreign deposit costs have been 
adjusted to U.S. dollars using foreign exchange rates, 
productivity factors, and inflation rates. These costs reflect 
the cost of doing business within the foreign country in U.S. 
dollar equivalents. 

The Bureau of Mines developed the Supply Analysis 
Model (SAM) to perform economic analyses that present the 
results as the commodity price (referred to as "incentive 
price") needed to provide a stipulated rate of return (7). The 
rate of return used in this study is the discounted cash flow 
rate of return (DCFROR), most commonly defined as the rate 
of return that makes the present worth of cash flows from an 
investment equal to the present worth of all after-tax 
investments (23). For this study, a 15-percent DCFROR was 
considered as a necessary rate of return to cover the 
opportunity cost of capital plus risk. 

Prices used for byproducts are shown in table 4. Analyses 
were conducted in terms of constant January 1980 dollars. 
No escalation of either costs or prices was included, since it 
is assumed that any increase in cost would be offset by an 
increase in price. 



TABLE 4 Byproduct commodity prices 1 

Commodity Price, January 1980 

Cobalt .'. $ 25.00 per pound 

Copper' 1 .00 per pound 

Gold 1 475.00 per troy ounce 

Iridium 350.00 per troy ounce 

Nickel ..'. 3.20 per pound 

Osmium 152.50 per troy ounce 

Palladium 1 54.57 per troy ounce 

Rhodium 800.00 per troy ounce 

Ruthenium 45.00 per troy ounce 

Silver 1 12 00 per troy ounce 

1 Based on January 1980 commodity prices, except for copper, gold, and 
silver, which were lowered from temporary highs to more historically realistic 
longrun prices. 

ASSUMPTIONS 

The objective of this analysis was to determine the amount 
of platinum potentially available from each deposit, regard- 
less of demand or other market conditions. In order to 
accomplish this, certain assumptions were used in the 
evaluation. They are 

• Preproduction activities for all nonproducing deposits 
began in January 1980. 

• Every operation produces at full capacity throughout its 
life. 

• Every operation is able to sell all of its output at the 
determined incentive price. 

• For operations for which complete processing facilities 
do not presently exist and are not modeled to be constructed, 
existing facilities elsewhere have the capacity to handle all 
products. 

In this study, the potential availability of platinum is based 
upon a minimum lead time for nonproducing deposits to 
achieve full production capacity. The preproduction period 
allows for the engineering and construction time necessary to 
initiate production under the proposed development plan. 
Any additional time lags and potential costs associated with 
filing environmental impact statements, acquiring permits, 
financing, etc., have not been included. 

Tonnage-price data from deposits producing platinum as 
the primary commodity were aggregated to construct the 
total and annual availability curves presented in this report. 
The Ely Spruce and Minnamax deposits, where platinum 
would be a byproduct, are not included in the availability 
curves, because platinum recovery from these deposits 
would be primarily a function of primary product (copper- 
nickel) prices and production, and, therefore, an economic 
evaluation that would attempt to calculate a platinum price 
necessary to exploit these deposits would not be representa- 
tive of the true availability of platinum from these sources. 



OPERATING AND CAPITAL COSTS 



Table 5 shows typical weighted-average operating costs 
per troy ounce refined platinum for underground mines in 
South Africa and Zimbabwe, and for placer deposits. Mining 
costs in South Africa are comparatively cheap, primarily 
because of the well-defined, predictable nature of the 
Merensky Reef, which allows for simple, conventional mining 
methods. In terms of dollars per metric ton of ore mined, 
mining costs for Zimbabwe would be nearly twice those for 
South Africa ($21 versus $1 1 ) owing to engineering problems 
associated with mining the Great Dyke. Total Zimbabwean 
operating costs would be nearly five times those for South 
Africa, largely because of the grade difference between the 
Great Dyke and Merensky Reef. 



10 



TABLE 5.— Estimated typical operating costs 



Mine type 



Ore treated. 

million metric- 
tons per year 



Weighted-average dollars 
per troy ounce retined platinum 



Mine 



Mill 



Misc.' Refining Total 



Underground: 
South Africa . 
Zimbabwe . . . 

Placer: U.S. 
and Colombia 



1.3-15 8 
.36 

12.0-13.0 



$151 
796 

468 



$33 
107 



$28 
175 



$16 
16 

27 



$228 
1.094 

501 



' Includes costs related to townsite facilities. 

Capital costs are an important factor in any decision to 
develop a mining property. The figures below are approxi- 
mate capital costs for an underground operation in Zim- 
babwe treating 360,000 metric tons of ore per year. Costs are 
in terms of January 1980 dollars per annual troy ounce of 
refined platinum. 



Plant and equipment: 

Mine v > $ 950 

Mill 1.100 

Smelter-PGM refinery complex 450 

Total 2,500 



The figures represent capital costs of begining an 
operation, exclusive of exploration, acquisition, and develop- 
ment costs. The smelter would produce a nickel-copper 
matte containing PGM, which would then be refined. For 
purposes of this analysis, the matte was assumed to be sent 
to Norway for refining of the copper and nickel, with the 
resulting PGM-bearing sludge returned to Zimbabwe for final 
refining into the separate PGM components. The figures 
above include costs of building a smelter and PGM refinery in 
Zimbabwe, but the costs associated with building a 
nickel-copper refinery in Norway are not included. 



ANALYSIS OF PLATINUM AVAILABILITY 



TOTAL AVAILABILITY 

The total amount of recoverable platinum potentially 
available from the deposits included in the analysis is 200 
million troy ounces, more than 99 percent of which is 
contained in primary platinum deposits. The four producing 
deposits (three from South Africa, and Choco Pacifico in 
Colombia) account for 106 million troy ounces, or 53 percent 
of the total. 

Figure 5 shows the total amount of platinum potentially 
available from primary deposits at various incentive price 
levels. The curve has been smoothed to avoid disclosing 
proprietary deposit data. There are about 110 million troy 
ounces of platinum available at the January 1980 producer 
price of $420 per troy ounce. About 99 percent of the total 
amount potentially available at $420 is from producing 
deposits; all platinum mines currently producing could 
operate profitably at that price. 

Highly significant in terms of future potential availability is 
the fact that there would be only a very small amount of 
additional platinum available between $420 and $1 ,800 per 
troy ounce. Nonproducing Zimbabwean deposits contain 42 
percent of the total platinum recoverable from deposits 
included on the curve and account for nearly all of the 
platinum available at relatively high cost. The discovery of 




50 I0O I50 200 

TOTAL RECOVERABLE PLATINUM, milliontroy ounces 

FIGURE 5. — Total platinum potentially available 
from primary platinum deposits. Costs are in 
January 1980 dollars. Incentive price includes a 
1 5-percent rate of return on investments. 



new economically viable deposits or proven development of 
the vast resources contained in the UG2 and/or Platreef 
could have a large impact on the availability of platinum at 
economically viable prices. 

The weighted-average incentive price for producing South 
African properties is $140 per troy ounce, compared with 
$1,830 for the nonproducing Zimbabwean deposits. The 
large disparity in price is due principally to the differences in 
platinum grade between the Merensky Reef and the Great 
Dyke. The Merensky Reef platinum grade is about 2.5 times 
higher than that of the Great Dyke. 

ANNUAL AVAILABILITY 

The total availability curve has been disaggregated in 
order to illustrate the annual amount of platinum potentially 
available at selected incentive prices through the year 2000. 
For the annual availability curves, it was assumed that all 
deposits are producing at full capacity, preproduction 
activities for nonproducing deposits began in 1980, and there 
are no additions to demonstrated resources through time. 
Deposits containing byproduct platinum (Ely Spruce, Minna- 
max) are not included on the curves. 

The estimated world demand for primary platinum in 1978 
was about 2.7 million troy ounces; 40 percent of the demand 
was from the United States. Annual world demand is 
expected to increase about 30 percent by 1990 to nearly 3.5 
million troy ounces (13). 

As shown on figure 6, at the January 1 980 producer price 
of $420 per ounce, an estimated 2.3 million troy ounces of 
platinum could potentially be produced annually from market 
economy countries through the year 1992. Over 99 percent 
of this total would be supplied from mines that are currently 
producing. At the 1980 level of production, an additional 0.8 
million troy ounces could be potentially available annually 
from deposits in the Soviet Union. 

In order to meet the 1 990 projected world demand of 3.5 
million troy ounces, analyses indicate that platinum price 
would have to increase. However, owing to the highly regular 
and predictable nature of the Merensky Reef, South African 
producers are capable of rapidly expanding production from 
existing mines in response to increases in demand. This 
situation could result in resisting further price increases. 
Furthermore, it is expected that nonproducing deposits, 
particularly the UG2 and Platreef, will be brought into 
production within the near future. 

The annual availability curve indicates that the amount of 
metal potentially available at $420 per troy ounce could 
decrease by about 44 percent (from 2.3 million to 1 .3 million 
troy ounces) by 1993. This decrease is due largely to the 



11 



4 




1 


1 


1 


I 




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■ . 






3 
O 




f 
/ 
/ 




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o 

£ 3 






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o 






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/ ..... 




$2,000 





h 






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2 2 








Y 




- 


h- 














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$1,500 




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$ 420 




< . 














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19 






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80 


1984 


1988 


1992 


1996 


20C 



YEAR 



FIGURE 6. — Annual platinum potentially avail- 
able at selected incentive prices. Costs are in 
January 1980 dollars. Incentive price includes a 
1 5-percent rate off return on investments. 



cessation of production from the Impala deposit, which 
currently accounts for 40 percent of South African produc- 
tion. However, Impala, like other South African operators, 
has the potential to expand operations into other resources 
(e.g., UG2) of the Bushveld Complex. 

AVAILABILITY FROM DOMESTIC SOURCES 

The total amount of recoverable platinum potentially 
available in the U.S. deposits analyzed is about 2.3 million 
troy ounces, about one-third of which is contained in the Ely 
Spruce and Minnamax deposits, which would produce 
byproduct platinum. At assumed production capacities, U.S. 
deposits are capable of producing 113,000 troy ounces 
annually. However, in 1990, none can be produced from 
primary platinum deposits at the January 1 980 price of $420, 
and large quantities of imports will be required to meet 
projected domestic needs. Of course, the total amount of 
platinum potentially available could be substantially higher if 
currently unknown platinum-bearing deposits come into 
production or if the deposits analyzed prove to contain 
additional demonstrated resources. The amount of platinum 
available on an annual basis (regardless of price) could be 
different if production levels are higher or lower than those 
assumed for this analysis. 



ANALYSIS OF FACTORS AFFECTING PLATINUM AVAILABILITY 



IMPACT OF BYPRODUCT CREDITS 

The incentive price for a deposit is partially a function of the 
marketability of the byproduct commodities and the prices 
received for them. The following values represent weighted- 
average percentages of revenues derived from the various 
products from South African and Zimbabwean deposits, 
based on the byproduct prices shown in table 4 and $420 per 
troy ounce for platinum: 

South Africa Zimbabwe 

Platinum 58 41 

Palladium 9 15 

Copper-nickel 21 44 

Other 12 

South African operators are less dependent on byproduct 
revenues than Zimbabwean operators would be if they were 
able to operate economically at these prices, or if commodity 



«J 3,600 

c 

° 3,200 
g 

^2,800 

= 2,400 
o 

UJ 2,000 
o 

rr 

°- 1,600 

UJ 

> 

H 1,200 

z 

UJ 

Z 800 

5 

2 400 



No byproduct credits *-i 




Bose case 



a 50 100 150 200 

TOTAL RECOVERABLE PLATINUM, million troy ounces 

FIGURE 7 — Potential platinum availability, 
without byproduct credits. Costs are in January 
1980 dollars. Incentive price includes a 15- 
percent rate of return on investments. 



prices were to remain constant relative to each other but 
increase to a level at which the deposits could be operated 
economically. 

One of the assumptions inherent in the availability curves 
is that each operation is able to sell all of its output at the 
determined incentive price for the primary commodity. A 
necessary element of this assumption is the condition that 
each operation is able to sell all of its byproducts at the 
assigned prices. The inability of potential Zimbabwean 
producers to market byproduct commodities, especially 
copper and nickel, could have a severe impact on platinum 
production. 

In order to quantify the effects of byproduct revenues on 
total potential platinum availability, all credits from these 
commodities were eliminated. The results are shown in figure 
7. Only one deposit, Salmon River, could produce at $420; 
total availability at that price decreased to virtually nothing. 
The weighted-average incentive price for South African 
producers increased to $475. Were byproduct prices to 
increase by 25 percent, the total amount of platinum 
available at $420 would increase by only 6 percent. 

IMPACT OF OPERATING 
AND CAPITAL COSTS 

In order to assess the impact on potential platinum 
availability of increases in costs of production such as 
energy, materials, and labor, operating costs for all deposits 
were increased by 25 percent. The weighted-average 
incentive price for producers increased by $60. Although this 
change represents a 43-percent increase, producing 
deposits remained substantially below the January 1980 
producer price of $420, and total platinum available at that 
price was not affected. The weighted-average incentive price 
for Zimbabwean deposits increased by 20 percent, to nearly 
$2,200. Figure 8 shows the resulting availability curves for 
deposits in the "low cost" portion of the total availability curve. 

Capital costs, including initial investments and periodic 
reinvestments, account for only a small percentage of total 
production costs. Therefore, even large increases in capital 
costs would have an insignificant effect on availability. This is 



12 



c 

1 
I 



400 



- 


1 1 1 — 




// 
// 








/ / 




25-perce 1 ost >ncreose^ 




/ / 

/ / 








~Bose cose 


- 






■ 1 1 — 



a 25 50 75 100 125 

TOTAL RECOVERABLE PLATINUM, milbon troy ounces 

FIGURE 8. — Platinum potentially available from 
"low cost" deposits, with a 25-percent operating 
cost increase. Costs are in January 1980 dollars. 
Incentive price includes a 15-percent rate of 
return on investments. 

true even for nonproducing deposits, for which complete 
mine and processing facilities would be constructed. In fact, a 
25-percent capital cost increase for Zimbabwean deposits 
resulted in only 3-percent increase in incentive price. 

SECONDARY SUPPLY FROM U.S. SOURCES 

The quantity of platinum recycled in the United States was 
approximately 687,000 troy ounces in 1980 (16, p. 3). This 
figure could rise dramatically if recycling of automobile 
catalytic converters becomes commercial on a large scale. 
The U.S. automobile industry accounted for 46 percent of 
U.S. platinum consumption in 1980 (16, p. 6), and it has been 
estimated that, by the late 1980s, about 300,000 troy ounces 
of platinum will become available annually in the United 
States in the form of spent converters (21). Were the 
domestic automobile industry to become, in effect, nearly 
self-sustaining in terms of platinum production and consump- 
tion through recycling of catalytic converters, U.S. demand 
for platinum from primary sources could decrease dramati- 
cally. 



TECHNOLOGICAL ENHANCEMENTS 

In view of Western Platinum Ltd.'s announced plans to 
exploit the UG2 of the Bushveld Complex using a process 
developed by South Africa's Institute of Metallurgy, the 
problem of high chromite content of UG2 ore may have been 
solved. Other South African producers are known to be 
developing their own processes to treat UG2 ore. The 
commercial feasibility of any of these processes could have a 
dramatic impact on the availability of platinum. 

The Bureau of Mines research program is oriented toward 
alleviating dependence on imports of critical and strategic 
minerals. The Bureau's Reno (Nev.) Research Center has 
devised a method for preparing a platinum-palladiumi 
concentrate from Stillwater ore. Flotation using mercap- 
tobenzthiazole (MBT) collector in sulfuric acid resulted in a 
final concentrate grade as high as 28.5 oz/t (1). A pilot 
flotation mill, processing ore at approximately 100 pounds 
per hour, will be operated to provide data for an evaluation of 
the technical and economic feasibility of the flotation process. 
Future research will focus on improvement on the two-stage 
leaching technique for extraction of PGM. 

The Twin Cities (Minn.) Research Center has conducted 
differential flotation studies to separate the copper and nickel 
content of the Duluth Gabbro sulfides into their respective 
fractions. About 50 percent of the PGM are being recovered 
in the nickel fraction. Platinum-group metals occur in minute 
quantities and are difficult to analyze. Future research on 
recovery of PGM from the nickel-rich matte by leaching 
process is planned for 1 982. 

The Albany (Oreg.) Research Center has conducted 
detailed beneficiation of potential platinum resources from 
four Alaskan deposits: Salt Chuck, Snettisham, Union Bay, 
and Yakobi Island (6). Gravity concentration, magnetic 
separation, and froth flotation procedures for each deposit 
were developed. 

The Avondale (Md.) Research Center and the Defense 
Property Disposal Service (U.S. Department of Defense) 
initiated programs to recover precious metals from electronic 
scrap. The Avondale Research Center plans to produce 
precious metal-bearing concentrates from electronic relays, 
switches, and automotive components. Development of 
hydrometallurgical procedures for selectively removing base 
metais from the concentrates is also part of this research 
program. 



SUMMARY AND CONCLUSIONS 



Major known platinum deposits located in five market 
economy countries were chosen for detailed analysis. The 
total amount of recoverable platinum potentially available at 
the demonstrated resource level from those deposits that do 
or would produce platinum as the primary product is about » 
200 million troy ounces, with producing mines accounting for 
slightly greater than half of the total. The amount of platinum 
potentially available at or below the January 1980 producer 
price of $420 per troy ounce is about 1 10 million troy ounces. 

South African producing mines, which contain nearly 53 
percent of the recoverable platinum in the deposits analyzed, 
have a weighted-average incentive price of only $140 per 
troy ounce. Zimbabwean deposits, all of which are nonpro- 
ducing, contain 42 percent of the total and have a much 
higher incentive price, averaging $1 ,830. In terms of dollars 
per troy ounce of refined platinum, Zimbabwean operating 
costs are about five times those for producing South African 
deposits. The large difference in cost is due principally to 
grade differences between the Merensky Reef and the Great 
Dyke. 

At a price of $420, an estimated 2.3 million troy ounces of 
platinum could be produced annually from market economy 
countries. This quantity appears adequate to meet current 
demand; however, an increase in platinum price may be 
required in order to satisfy the projected 1990 world demand 



of 3.5 million ounces. In 1990, there will be no known U.S. 
primary platinum deposits capable of providing platinum at 
$420 per ounce. Regardless of price, at assumed production 
capacities, domestic deposits are capable of providing less 
than 10 percent of annual U.S. requirements, and large 
quantities of imports will be necessary to satisfy projected 
demand. 

There are several situations that could offset a significant 
increase in price at projected platinum demand levels: 

• Currently, South African producers appear capable of 
rapidly expanding production from existing mines in re- 
sponse to increases in demand. 

• Although production costs are not yet known, commer- 
cial development of the UG2 and Platreef of the Bushveld 
Complex would more than double the amount of platinum 
available from South African deposits. 

• Improvements in processing technology could increase 
the amount of platinum available in producing or currently 
unexploitable deposits. 

• Discovery of new deposits could also contribute to 
potential supplies. 

• Expanded recycling efforts (e.g., of automobile catalytic 
converters) could significantly reduce demand for platinum 
from primary sources. 



13 



BIBLIOGRAPHY 



1. Bennetts, J., E. Morrice, and M. M. Wong. Preparation of 
Platinum-Palladium Flotation Concentrate From Stillwater Complex 
Ore. BuMines Rl 8500, 1981, 18 pp. 

2. Buchanan, D. L. Platinum — Great Importance of Bushveld 
Complex. World Min., v. 33, No. 9, August 1980, pp. 56-59. 

3. Chemical Engineering (New York). Plasma Process Is Ready 
for Metals Recovery. V. 86, No. 5, February 1979, pp. 75-79. 

4. Clement, G. K., Jr., R. L. Miller, P. A. Seibert, L. Avery, and H. 
Bennett. Capital and Operating Cost Estimating System Manual for 
Mining and Beneficiation of Metallic and Nonmetallic Minerals 
Except Fossil Fuels in the United States and Canada. BuMines 
Special Pub., 1980, 149 pp. Also available as: 

STRAAM Engineers, Inc. Capital and Operating Cost Estimat- 
ing System Handbook — Mining and Bneficiation of Metallic and 
Nonmetallic Minerals Except Fossil Fuels in the United States and 
Canada. Submitted to the Bureau of Mines under contract 
JO255026, 1977, 374 pp.; available from the Minerals Availability 
Field Office, Bureau of Mines, Denver, Colo. 

5. Compania Minera Choco Pacifico S.A. 1973 Annual Report. 
23 pp. 

6. Dahlin, D. C, A. R. Rule, and L. L. Brown. Beneficiation of 
Potential Platinum Resources From Southeastern Alaska. BuMines 
Rl 8553, 1981, 14 pp. 

7. Davidoff, R. L. Supply Analysis Model (SAM): A Minerals 
Availability System Methodology. BuMines IC 8820, 1980, 45 pp. 

8. Duluth News Tribune. AMAX Cuts Babbitt Staff. Aug. 1 1 , 1 981 , 
sec. A, p. 2. 

9. Engineering and Mining Journal. Anaconda Begins Permit 
Process for Stillwater Complex. V. 182, No. 9, September 1981, 
p. 11. 

10. Spokane Industralist Re-Opens Only U.S. 

Plantinum Mine. V. 182, No. 7, July 1981, p. 41. 

11. Financial Times (London). Mining International Yearbook. 
1981, 714 pp. 

12. Harrison, M. W. Mineral Resources of Zimbabwe — An 
Overview. Economic Conference, Zimbabwe Promotion Council, 



September 1980, 17 pp.; available upon request from T. F. Anstett, 
Bureau of Mines, Denver, Colo. 

13. Jolly, J. H. Platinum-Group Metals. Ch. in Mineral Facts and 
Problems, 1980 Edition. BuMines Bull. 671, 1981, pp. 683-706. 

14. Mining Journal (London). Western Platinum to Exploit UG2 
and Expand Production by 50,000 Oz/Yr. Mining Annual Review 
1981, p. 473. 

15. Mohide, T. P. Platinum Group Metals— Ontario and the World. 
Ontario Ministry of Natural Resources, Ontario Mineral Policy 
Background Paper No. 7, 1979, 162 pp. 

16. Moore, C. M. Platinum-Group Metals in the First Quarter of 
1981. BuMines Mineral Industry Surveys, June 22, 1981, 11 pp. 

17. National Materials Advisory Board (National Research Coun- 
cil). Supply and Use Patterns for the Platinum-Group Metals. 1980, 
198 pp; available from NTIS, PB 80-179088. 

18. Newman, S. C. Platinum. Inst. Min. and Met., Trans., Sec. A, 
v. 32, No. 797, pp. A52-68. 

19. Northern Miner. Platinum Find Has Tonnage Potential. V. 60, 
No. 32, Oct. 24, 1974, pp. 1, 15. 

20. Page, N. J., and J. C. Dohrenwend. Mineral Resource 
Potential of the Stillwater Complex and Adjacent Rocks in the 
Northern Part of the Mount Wood and Mount Douglas Quadrangles, 
Southwestern Montana. U.S. Geol. Survey Circ. 684, 1973, 9 pp. 

21. Rosso, J. P. (Gemini Industries, Inc.). Private communication, 
1982; available upon request from T. F. Anstett, Bureau of Mines, 
Denver, Colo. 

22. Stanton, R. L. Ore Petrology. McGraw-Hill Book Co., New 
York, 1972, 713 pp. 

23. Stermole, F. J. Economic Evaluation and Investment Decision 
Methods. Investment Evaluations Corp., Golden, Colo , 2d ed 
1974,449 pp. 

24. U.S. Bureau of Mines. Platinum-Group Metals. Sec. in Mineral 
Commodity Summaries 1982. P. 114. 

25. U.S. Geological Survey and U.S. Bureau of Mines. Principles 
of a Resource/Reserve Classification for Minerals. U.S. Geol. Survey 
Circ. 831, 1980, 5 pp. 



14 



APPENDIX A.— CENTRAL ECONOMY COUNTRIES 



Albania 

Bulgaria 

China 

Cuba 

Czechoslovakia 



German Democratic Republic 

Hungary 

Kampuchea 

Laos 

Mongolia 



North Korea 
Poland 
Romania 
Soviet Union 
Vietnam 



APPENDIX B.— MINING AND PROCESSING OPERATIONS FOR A TYPICAL SOUTH 

AFRICAN PROPERTY 



Owing to the highly regular and predictable nature of the 
dip. strike, thickness, and grade of the ore zone, the 
Merensky Reef of the Bushveld Complex is mined using 
simple, straightforward methods. Access to ore can be 
gained from inclined and vertical shafts. The mechanized 
longwall mining method is being introduced in most of the 
mines, taking the place of labor-intensive hand loading of 
blasted ore, and hand tramming. Face scrapers move ore to 
gullies where the ore is loaded into cars pulled by battery 
locomotives, which discharge their load into passes. From 
the passes, the ore is hoisted to the surface. 

The processing of ore to matte is shown in figure B-1 . The 
mined ore is hoisted to the surface, crushed, ground, and 
then floated to recover the metallic minerals. In addition to 
flotation, some mining companies include gravity separation 
of a metallic mineral fraction, which is sent directly to the 
precious metals refinery. 

The flotation concentrate, which in some cases is 
pelletized, is sent to an electric furnace where it is partially 
oxidized to a "green matte." The "green matte" is transferred 
to converters where, under an oxygen-rich atmosphere, it is 
melted and oxidized, resulting in a "white matte." 

The "white matte" is sent to a nickel-copper refinery, and 
the resulting sludge from nickel-copper refining is sent to a 
precious metals refinery for further separation. 

The precious-metal concentrates from the nickel and 
copper refinery stages have a PGM content which normally 
ranges between 25 percent and 75 percent. The first stage of 
the refining process is the removal of the base metal content 
by roasting, followed by leaching processes. The individual 
PGM are then separated and refined by chemical methods. 

Until the early 1970's, the refinery methods most 
commonly used were variations of the so-called "convention- 
al process," based on selective precipitation methods. In 
recent years, however, new techniques based on solvent 
extraction and ion-exchange methods have been developed. 
These are replacing the older methods on a commercial 
scale. 

CONVENTIONAL PROCESS 

A simplified flowsheet illustrating the sequence of steps 
involved in the conventional process is given in figure B-2. In 
the initial step, aqua regia (3 volumes concentrated HCI 
combined with 1 volume concentrated HN0 3 ) is used to 
dissolve Pt, Pd, and Au, as chlorides, leaving an insoluble 
residue containing the other PGM. Gold is removed from this 
solution by the addition of a reducing agent, while platinum 
is precipitated as an impure platinum sponge, which is then 
redissolved and purified by bromate hydrolysis. 

Palladium is then removed from the filtrate by a process 
similar to that for platinum. The treatment comprises the 
formation of dichlorodiammine palladium (II) and its precipita- 
tion as a high-purity salt, which is then ignited to form 
palladium sponge. 

The insoluble residue remaining after initial aqua regia 
extraction of the platinum and palladium is blended with 



available concentrates high in Rh, Ir, and Ru. This mix is then ■ 
smelted with lead oxide ore, lead carbonate, fluxes, and 
carbon, and the molten charge is poured into a conical mold. 
After solidification, the slag is removed and the lead (which 
contains the PGM) is melted and granulated. A parting 
process with HN0 3 dissolves most of the Ag, Pb, and any 
residual Pt and Pd. The filtrate is then treated for the recovery 
of each of these metals. 

The insoluble residue from the HN0 3 treatment consists of 
Rh, Ir, Ru, and Os in concentrated form. The subsequent 
separation of these metals involves a much more elaborate 
series of steps that commonly includes fusion, leaching, 
numerous chemical purification stages, precipitation, roast- 
ing, oxidation or reduction, and frequently includes (for Os, 
Ru, and Ir) ignition and reduction by hydrogen to yield metal. 
All of the filtrates and insoluble residues generated in the 
separations for the individual metals are recycled to the 
appropriate stages earlier in the process so that metal losses 
at this stage are very small. However, some osmium is 
usually lost as the volatile tetraoxide during smelting or lead 
granulation operations. 

Although the processes vary in detail from plant to plant, 
those using the conventional procedures all employ methods 
based on selective precipitation techniques from a mixed 
PGM solution. In terms of the degree of separation achieved, 
however, these are generally rather inefficient, and even 
where conditions are favorable for complete removal of the 
desired elements from solution, the precipitate is contamin- 
ated by entrained mother liquor and requires thorough 
washing. This tends to lead to multiple purifications involving 
redissolution and reprecipitation, which, in turn, result in the 
need for increased recycling and retreatment. 

Recoveries achieved during the refining stage are typically 
about 98 percent. However, the percentage of metal 
recovered in refined form is only 75 percent of the assayed 
PGM content of ore, while nickel and copper recoveries are 
approximately 79 percent. The reason for these discrepan- 
cies is that substantial portions of the total metal content are 
lost during the milling and earlier nickel-copper concentration 
stages. 

SOUTH AFRICA NATIONAL INSTITUTE OF 
METALLURGY (OPNIM) PROCESS 

A new process for the separation of PGM and gold based 
on solvent extraction was developed by the South African 
National Institute of Metallurgy (NIM) in the early 1970's. A 
generalized flowsheet for the OPNIM process is given in 
figure B-3. A commercial plant has now been installed at the 
Lonrho platinum refinery at Brakpan, South Africa, for 
extraction of Rh, Ru, Ir, and Os. Impala Platinum is also 
understood to be using the process, and Matthey Rustenburg 
Refiners is carrying out research independently on solvent 
extraction techniques. 

The solvent extraction process requires preleaching 
treatments that result in the easy separation of the base 
metals by selective leaching and allows complete dissolution 



15 




Mining 



I 



Ore size reduction 
crushing and grinding 



Froth flotation 



»■ Gravity concentration 



PGM refining of 
heavies, 30-40% PGM 



Thickening, filtering, 
drying 




Pelletizing 



Smelting 



I 



Converting 

~~t — 



Cooling 



T 



Mat t e size reduction 
crushing and grinding 



I 



Magnetic separation 



Pressure leaching to 
give PGM residue 



T 



Pressure leaching 
nonmagnetics 



Electrowinning 



PGM residue refining 
60% PGM 





FIGURE B-1 Flowsheet, South African 

PGM ore processing. 



I Preleaching treatment I 





Aqua regia 
leaching 


■* > 

Insolubles 




i 


Leach liquor 

f 






Gold sponge 


Gold 
precipitation 








i 








Platinum 
precipitation 




* 




| Platinum purification 




♦ 






Palladium 
precipitation 






Impure "salt" 


1 














i ' 




Zinc reduction 






Palladium 
purification 
























1 








Effluent 


Lead smelting 








1 






Slags 




Lead and 




Parting in HN0 3 
and aqua 


PGM 




Pt, Pd, Au 1 




regia 1 


eacmng 





Peroxide fusion 



: 



RuO«, Os0 4 



Acidification 

I 



Ruthenium-osmium 
separation 



, t. , 

; Iridium purification | 



Ruthenium and 
osmium distillation 

I 



Iridium 
precipitation 



Rhodium 

purification and 

precipitation 



FIGURE B-2. — Flowsheet, conventional 
refining process. 



16 









Preleaching treatments 






f 






Base-metal leaching 


Base-metal effluent 






J 






Leaching with CI and HCI 


Low-PGM residue 


























Gold 
extraction 




Stripping 




Metal precipitation 


~l 








1 
















Palladium 
extraction 




Stripping 




"Salt" precipitation 


1 
























Platinum 
extraction 




Stripping 




Salt precipitation 












- 














Osmium 
distillation 


Os0 4 


Salt precipitation 

- 










J 


1 














Ruthenium 

extraction 

• 




Stripping 




- 

Salt precipitation 


"1 








_ J 
















Iridium 
extraction 




Stripping 




Salt precipitation 


H 








1 
















Rhodium 
extraction 




Stripping 




"Salt" precipitation 


— 1 








Fin 


al barren effl 


uent 









FIGURE B-3.— Flowsheet, OPNIM refining process. 



of the PGM by a single CI-HCI leach. The process 
dissolves at least 99 percent of the primary PGM (Pt and Pd) 
and Au, and 95 percent of the remaining PGM. The solvent 
extraction steps are carried out in continuous countercurrent 
operations. Metal recoveries from stripping solutions are 
accomplished by the precipitation of insoluble salts or 
complexes, except in the case of gold. Palladium is 
recovered prior to platinum, and osmium is recovered by a 
distillation process rather than by solvent extraction. 

The main advantages of the OPNIM process are the 
savings in terms of time and cost. The processing time for 



recovery of secondary PGM is reduced from between 4 and 6 
months for the conventional process to 20 days for the 
OPNIM process, and 99.95 percent purity of products is 
achieved. In addition, the process uses 20 percent of the 
labor of the conventional process because the techniques 
are simpler; they can be more highly automated and involve 
less reprocessing. Finally, it is reported that the capital costs 
of equipment required for the extraction of the secondary 
PGM with OPNIM may be reduced by 50 percent in 
comparison with those for the conventional process. 



fcU.S. Government Printing Office : 1982 - 383-747/8693 



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